This column is for investors willing to take more risk and potentially receive more reward.  The stocks mentioned in this column are not recommended to buy or sell.  They're brought to your attention so you can investigate them further to determine if they fit your risk profile.  Most of the stocks will have less than $1 billion of market capitalization, have more volatility than other stocks, and oftentimes no earnings.  And some will have tremendous stories.

September 17, 2009 - NewMarket Corp. (NEU-NYSE) through its subsidiaries, engages in the petroleum additives and real estate development businesses. It offers lubricant additives that are used in various vehicle and industrial applications, including engine oils, automatic transmission fluids, gear oils, hydraulic oils, turbine oils, and in various other applications where metal-to-metal moving parts are utilized.

In addition, the company owns approximately 64 acres of real estate property in downtown Richmond, Virginia. It has operations in the United States, Europe, Asia, Latin America, Australia, India, the Middle East, and Canada. The company was founded in 1887 and is headquartered in Richmond, Virginia.

Here's the headline: Earnings are projected to hit $8.14 this year, up from $4.61 last year. Next year, however, they're coming back to earth and estimated at $6.34. Over the last 5 years, average annual earnings growth has been 43%. For the next 5 years, the estimate is for 15% a year, on average. Third quarter earnings are due out in October and should be $1.91, compared to $1.07 in the same period last year. For the fourth quarter, analysts see $1.54 vs. $1.27 last year in the fourth.

The secret to success: lower costs. Even with a slip of 13% in sales, profits were up almost 78% in the second quarter. Most of the improvement came from the Petroleum Additives division where results doubled, and sales were well ahead of last year's second quarter.

But don't make projections based on one quarter. Management hiked prices recently, but analysts see total sales down by 10% this year, to $1.46 billion, below the $1.62 billion of last year. Next year, the estimate is for $1.57 billion. Revenue declines are showing up in all products and foreign exchange rates are working against the company. Furthermore, operating expenses are starting to creep higher as well as raw material costs. That's why this year may be a banner year for at least the next couple.

The stock has been on fire for 10 months, hitting a low of $23.37 in November of last year, then rebounding to its current all time high of $93.89. And that's the concern. Investors may be a little too enthusiastic about the stock. While earnings will be great this year, that trend won't continue, at least not with the global economy in its current state. In fact, earnings will be lower next year.

More numbers: Price to sales is .92. Price to Book is 3.89. Operating margin is 10.62% whle Profit margin is 6.27%. Return on equity for the last 12 months was 26.93%. Total cash is $112.05 million which is $7.37 per share in cash. Total debt is $221.42 million or 20% of capital. Current ratio is 2.87. Book value per share is $23.66. Beta is a strong 1.62. There are only 15..2 million shares outstanding. Insiders own 22.65% of those. The float is 12.63 million. There is a dividend of $1.00 a share, giving a yield of 1.10%.

This stock has a lot of good going for it. Investors know that already and have bid up the price to new highs. For new investors, it would seem appropriate to watch and wait on this one for a better entry point, if it meets thier requirements for investing. There is no question profit growth has been spectacular this year. There is a question, however, as to whether it's a one year wonder or if global economic recovery will allow the company to grow even better in the future.

- Company Web site: www.newmarket.com

- Ted Allrich